German concerns threaten Greek bailout: Greece faces a fight to seal its latest three-year bailout after the German finance ministry criticised the plans before a meeting of Eurozone Ministers.
Oil supply outstrips rising demand: A glut in the world’s oil supply will last until at least the end of next year, the International Energy Agency warned, despite the fastest rise in demand in five years.
Ex-pensions Minister stays on message with Royal London: Steve Webb is to join the pensions and life assurance company Royal London six months after losing his government job after the general election.
Macy’s looks to Alibaba for a sales boost: Macy’s is to start selling its merchandise on an “exclusive flagship online store” on Alibaba’s Tmall platform in China in a bid to boost international sales at a time when growth at home is flagging.
Estate agents are returning to the fold, claims Zoopla: Zoopla has made headway in its fight against OnTheMarket, winning back some of the estate agents that deserted for its new rival this year.
BuzzFeed gets rich on diet of listicles: The phenomenally successful online media company that popularised the “listicle” more than trebled its revenue between 2012 and 2013 while massively ramping up its editorial budget, leaked documents suggest — trends that continued into 2014.
The digital adverts for your eyes only: Britons could soon become used to Minority Report-style advertising that personalises outdoor billboards to those passing by.
News Corp drives ahead as investments payoff: News Corp reported better earnings than expected after cost cutting efforts and new investments began to pay off.
Zoopla Chief Executive Alex Chesterman in line for £19 million bonus: The Founder of the Zoopla property website could land shares worth more than £19 million under a new bonus scheme designed to keep him committed to the business. Alex Chesterman, who launched Zoopla seven years ago, is also selling a quarter of his 4 per cent stake, cashing in shares worth £11 million.
Arctic drilling plans risky for Shell’s reputation and profits, says former BP Chief Lord Browne: The former head of BP has said drilling for oil in the Arctic could damage Shell’s reputation and risk its profits, as it was revealed the company could get the necessary permits to restart drilling as early as this week.
Pressure builds on leading stores to scrap rip-off VAT charges as shops claim it would be ‘impossible’ to apply selective discounts: Pressure is mounting on several leading airport stores to scrap rip-off VAT charges, after many rival shops and retail experts rubbished claims by one chain that it would be technologically “impossible” to apply selective discounts.
Pru on prowl for Asia takeovers, hints Mike Wells: The new Chief Executive of Prudential has hinted that Britain’s largest insurance company is on the lookout for takeovers across its landmark Asian business.
Pandora sparkles as U.K. sales rise 30 per cent: The jewellery business Pandora has cashed in on the extra money in our pockets as sales jumped 31 per cent across Britain.
Ministers freed to intervene in fast-track fracking drive: The fracking industry has had a shot in the arm as the government puts local councils on notice that Ministers will step in to override any “slow and confused” decisions on shale drilling applications.
Emerging markets and U.S. drive rise in sales at G4S: The loss of a botched electronic tagging contract held back revenue growth at G4S in the first half of the year, taking the shine off new business wins in the U.S. and Asia.
Richard Buxton to take the top job at Old Mutual funds arm: Richard Buxton, the U.K. equity fund Manager, is to take over as Chief Executive of Old Mutual Global Investors while continuing to run his U.K. equity funds, in a rare combination of roles.
Canadian oil sands crude halves in price: Oil from Canada’s tar sands has skidded towards $20 a barrel, a level not seen for international crude prices in 12 years, tightening the screws on energy companies and the economy of the world’s fourth biggest supplier.
Houlihan Lokey IPO fails to woo investors: Houlihan Lokey, the restructuring expert that has advised on some of the U.S.’s largest bankruptcies, has failed to pull in expected investor demand for its initial public offering.
GSK closes U.S. site after discovery of Legionnaires bacteria: GlaxoSmithKline has temporarily shut down its manufacturing site in North Carolina after a bacteria that causes Legionnaires disease was discovered in its cooling tower on Tuesday.
Li Ning net loss narrows in first half: Li Ning, the troubled Chinese sportswear company that is one of the mainland’s best known brands, saw losses decline and sales rise as it battles to regain its place in the mainland sportswear market.
Nomad nears deal for Findus’s Europe arm: Nomad Foods, an investment vehicle targeting the out-of-favour frozen foods sector, is nearing a deal to buy the continental European operations of Findus for just over £500 million, according to people familiar with the matter.
Cisco hunts for deals to revive revenue growth: Cisco Systems’s new Chief Executive on Wednesday hinted at an acceleration in acquisitions and disposals at the U.S. networking equipment maker as it seeks to boost revenue growth and realign its business.
FIS buys SunGard for $9.1bn to undo ‘club’ deal: Fidelity National Information Services, a technology provider to banks and insurers, is buying SunGard Data Systems for $9.1bn, allowing its private equity Owners to offload one of the signature deals of the pre-crisis buyout boom.
Alibaba: nowhere to hide: At least Alibaba offers a U.S. dollar version of its earnings report. In future quarters a weaker renminbi will provide a boost to the dollar-denominated results. No such luck for the Chinese e-commerce juggernaut in its June quarter announced on Wednesday. Revenue growth of 28 per cent undershot expectations, sending Alibaba shares down a 10th. A few months ago company Founder Jack Ma, perhaps sheepishly, said he wished Alibaba could have remained private. Quarterly vagaries and market nerves will only reinforce that sentiment. Still, 28 per cent revenue growth at a company with a $200bn market cap remains remarkable and nothing has really changed about the broader narrative. A stunning $109bn of commerce was transacted on Alibaba websites in the first quarter. Half of its Chinese retail revenue now occurs on mobile devices. Along with its quarterly numbers the company committed to buying $4bn worth of its own shares. Is this really a better use of capital than the numerous investment opportunities the company says it has? If it costs $4bn to buy a little shareholder goodwill, Mr Ma’s apprehension about going public may make a bit of sense.
U.K. E&Ps: crude combinations: The international oil companies with the strongest balance sheets, such as ExxonMobil and Chevron, might seem likely buyers. Each has ratios of net debt to capital employed of about 15 per cent, less than half that of most in the sector. Many of the financially healthy companies also have higher cost portfolios, thinks Goldman Sachs. One good way to improve their asset quality: buy smaller, indebted companies with lower break-even cost oil and gas assets. Instead, smaller players should start thinking about consolidating among themselves — and if they do, the international oil companies might just follow. In the last oil rout, in the late 1990s, a number of midsized explorers came together to cope with low oil prices. British Borneo and Hardy Oil and Gas merged in 1998. Lasmo and Monument Oil a year on. Both were later swallowed up by Italy’s Eni. A number of combinations are possible among U.K.-listed explorers. Consider Premier Oil and EnQuest, both of which have substantial portions of their assets in the high-cost North Sea. The overlaps suggest upwards of £85 million in potential cost savings, from both overhead and exploration cuts, over the next two years, thinks Citi. Put Africa-focused Ophir together with Soco International’s Vietnam oil production and the savings could amount to almost a fifth of operating cash flow.
Hong Kong Exchanges: great red hope: The standard warning is particularly relevant to Hong Kong Exchanges and Clearing, which runs the city’s stock and futures markets and the London Metal Exchange. Such a lofty rating might appear justified on the basis of its results for the first half, when several records were broken amid a boom in China’s stock markets. Average daily turnover in the equity market almost doubled to $97bn (for comparison, the London Stock Exchange managed an increase of 13 per cent). Not bad for a market where trading still pauses for lunch. Turnover may be boosted if a link with the Shenzhen exchange receives regulatory approval. But volumes through the existing Stock Connect link with Shanghai have been fairly modest so far at about 5 per cent of the total — and that was during the boom. The group is debt free, so could do more diversifying LME-style deals. But for now it remains a play on China’s growth and liberalising markets. That is a compelling long-term story. But there will be setbacks along the way. The shares, down a third from their peak in May, could have further to fall.
Why investors should stop worrying and learn to love high CEO pay: How relaxed should investors be about Chief Executives becoming filthy rich, to frame a question in terms first used by Lord “Call me Peter” Mandelson? Intensely? Moderately? Or not at all? Rising inequality gives the question emphasis. Even in the dog days of summer there are news hooks. For example, property website group Zoopla on Wednesday unveiled a new incentive scheme for Chief Executive Alex Chesterman. This sets two stretch targets: a minimum 8 per cent total shareholder return and a threshold of 9.4 per cent for higher payouts. Mr Chesterman gets nothing if Zoopla undershoots the first target every year for four years. Modest outperformance could reward him with shares worth some £8 million. If the business doubled in value he would get £22 million. Public morality sets the context for the decisions of investors. But their main motivation should be pragmatism. Big Executive payouts are fine, so long as they coincide with periods of good performance. The cost is generally small in comparison to total overheads. CEOs who are bad or unlucky are easily (and frequently) ousted. Fat pay packets for experienced Bosses represent a sensible bet that Managerial skill sometimes makes the difference between corporate success and failure. Chill. It’s August.
Top redtop: Pearson has agreed to sell a 50 per cent stake in the Economist Group, which includes the “newspaper”, as the weekly calls itself despite all evidence to the contrary. Exor, a holding company of Italy’s powerful Agnelli family, will buy a 27.8 per cent holding for £227.5 million. The Economist will repurchase the balance of Pearson’s ordinary shares, with the effect that the stakes of remaining investors will rise. Our floor in the tower of ivory whiteness that The Economist occupies in St James’s was adorned with a large photo of Walter Bagehot, a Victorian editor who defined the liberal, technocratic ethos of the publication. Pearson’s disposal will leave Exor with a 43.4 per cent shareholding. But the purchaser has agreed that the constitution of the company may be changed to limit the voting power of any shareholder to 20 per cent. This looks positive for the independence of The Economist and thus for scrutiny of capitalism, as exemplified by sharp criticism of ballyhooed U.S. tech companies in this week’s edition.
The Daily Telegraph
Greece agrees draft deal with creditors – but waits for Germany to say yes: The Greek government on Wednesday agreed to a €6bn privatisation of ports, regional airports and the national grid as part of a package of reforms designed to unlock a third bail-out.
Watchdog cracks down on bonuses at payday lenders: Payday lenders face a new probe into their bonuses and staff reward schemes, as the Financial Conduct Authority fears consumer credit firms could be creating incentives for staff to behave badly.
Alibaba’s shares slide to record low as revenue growth disappoints: Alibaba’s share price fell to its lowest point since the Chinese e-commerce giant’s record-smashing flotation last September after the company announced a $4bn share buyback scheme and its quarterly earnings fell short of expectations.
Reckitt forced to license K-Y brand by competition regulator: Consumer goods giant Reckitt Benckiser will be forced to license out the K-Y lubricant brand it is buying from U.S. giant Johnson & Johnson to assuage concerns about the deal at the competition regulator.
Struggling dairy farmers scramble to sell milk directly to customers: Britain’s struggling dairy farmers are seeking ways to sell milk directly to customers as part of an ongoing crisis over pricing.
Kraft Heinz slashes 2,500 jobs in U.S. and Canada amid changing tastes: Kraft Heinz is cutting about 2,500 jobs as part of its plan to slash costs after the food companies combined earlier this year.
The Questor Column:
What would be on Buffett’s U.K. shopping list?: Warren Buffett’s biggest ever takeover deal should serve as a reminder to investors why apparently boring industrial companies in overlooked parts of the market are often attractive propositions. What’s more, there are plenty of U.K. shares in high-quality doers and makers going for less. The U.S.-based industrial giant has a powerful market position making turbine blades for the aerospace industry and other parts for the energy industry. Shares in Precision Castparts are also out of favour, down 14% from record highs as investors worry about an industrial slowdown. The only thing that was out of place was the price that Buffett’s Berkshire Hathaway is paying – $32bn (£21bn) or $235 per share, a 21% premium to the previous week is certainly not cheap. Cash was building up on the Berkshire Hathaway balance sheet and with U.S. stock markets near record highs Precision Castparts may have been the least worst option. The Buffett deal is interesting because, by looking at the themes he is following, it throws up alternatives in the U.K. markets. Bodycote, the FTSE 250-listed industrial group, heat-treats metal parts for the aerospace, car and oil and gas market. Stephen Harris, Chief Executive, has explained that this process is not simply cooking and has more in common with alchemy. The process of super-heating metal changes the crystalline structure of materials and increases qualities such as strength and durability. Bodycote is a world leader in its field. Another name that falls into the unloved industrial camp is the conglomerate Smiths. The company is an odd mix of medical equipment, airport security scanners and industrial seals for the oil and gas sector. Trading is difficult, with revenue and profits falling in the nine months to the end of May. Another idea is Fenner, which makes conveyor belts used in the mining industry to get coal and iron ore to the surface. Industrial shares will move with market cycles, but over the long term companies with a strong market position that make quality products will always deliver for investors. Buffett’s most recent – and biggest ever – acquisition is a useful reminder. U.K. industrial engineering. Questor says “Hold.”
Greek bailout terms to give Eurozone vast powers over policymaking: The Greek government is to surrender powers over vast areas of economic and social policymaking to its Eurozone creditors under draconian terms agreed for a new three-year bailout.
House price rises accelerate as demand spikes amid shortage of homes for sale: House prices rose faster in July as demand from buyers picked up, but the number of homes for sale fell to a record low, according to the latest monthly report from surveyors.
High court orders traders to pay £7.5 million for manipulating share prices: Three Hungarian traders and two investment firms have been ordered to pay £7.5 million after manipulating the share prices of 186 companies in London.
Co-op bank Boss praises move to waive £120 million fine as ‘pragmatic solution’: The Boss of the Co-operative Bank has described the decision by City regulators to waive a £120 million fine on the loss-making institution as “a pragmatic solution”. Niall Booker, the Chief Executive of the bank, said that any financial penalty needed to be weighed against the impact it would have on financial stability.
U.K. unemployment rises as most new jobs go to citizens of other EU states: Employment opportunities in Britain’s stalling labour market are largely going to workers from the rest of the European Union, according to the latest official data showing a second monthly increase in the number of people out of work.
Blue chips see red over China as global markets fall after Beijing central bank cuts value of yuan for second day running: Almost £24billion was wiped from the value of the U.K.’s biggest blue-chip companies after China’s central bank cut the value of its currency for the second day running.
Restaurant business founded by Sir Terence Conran dish up a stock market float: The restaurant business founded by Sir Terence Conran is being lined up for a stock market float. D&D London, the U.K.’s largest privately owned restaurant group, whose portfolio includes London’s Quaglino’s and Pont de la Tour, is controlled by private equity group LDC.
Loss-making Royal Bank of Scotland hands £3.4 million shares windfall to top Executives: Royal Bank of Scotland has dished out a £3.4 million shares windfall to its top Executives – just over a week after the Government began selling its stake in the bank at a £1.1billion loss.
China downgrades currency for second day sparking more carnage in world’s markets: A second shock devaluation of China’s currency has sparked another day of carnage in the world’s financial markets.
Tess Daly’s Pandora in sparkling form: Shoppers have fallen for Pandora’s charms as the Danish jeweller enjoyed a 31 per cent increase in U.K. sales in the second quarter.
The Scottish Herald
Spark Energy launches job drive: Spark Energy has unveiled plans to ramp up staff numbers and made senior hires from “big six” rivals ScottishPower and SSE as it nears a significant milestone in its development.
Masters arrives in Murgitroyd boardroom: Chris Masters, who was Executive Chairman of Scottish temporary power company Aggreko between 1997 and 2002, is joining the board of Glasgow-based patent and trademark attorney Murgitroyd.
Cairn Energy Chief hopes arbitration will end Indian tax dispute: The Chief Executive of Cairn Energy, Simon Thomson, has called for a speedy resolution to a $1.6 billion (£1bn) tax dispute in India that he said had caused big problems for the firm and rattled investors.
Car dealer eyes expansion in Scotland following strong growth in sales: The Chief Executive of Lookers, Andy Bruce, has said the car sales giant wants to acquire more dealerships in Scotland where the company has been recording rapid growth in sales.
Panmure analyst upbeat about potential of Parkmead prospects: Broker Panmure Gordon has highlighted a view that the prospects awarded to Tom Cross’s Parkmead oil and gas venture in the U.K.’s 28th Offshore Licensing Round are “easily some of the best in the company’s portfolio”, writes Ian McConnell.
Nevis Capital invests in Astec Precision: Private equity firm Nevis Capital has made a multi-million pound investment into engineering company Astec Precision.
Experts warn: Oil supply glut is growing: The global oversupply of crude which has led to a slump in oil prices will continue until late next year an authority on the industry has predicted.
Social enterprise fund opens: SIS Community Capital has said its social enterprise fund is open for applications.
Pearson sells Economist stake to Exor for £469 million: Italian firm Exor, controlled by the Agnelli dynasty, has become the biggest shareholder in the Owner of the Scots-founded the Economist news magazine after Pearson agreed to sell its 50 per cent stake.
Highland Experience Tours motors ahead with funding: A tour company is looking to drive its business forward after securing a £1 million finance package to buy six new mini-coaches.
Balfour Beatty losses widen in first half: Infrastructure and construction group has seen its half-year losses widen dramatically after counting the cost of legacy “problem” contracts in the U.K.
Sainsbury’s TU clothing website goes national: Sainsbury’s has launched its TU clothing website across the U.K. for the first time , as it seeks to challenge high street rivals and bolster its position in fashion.
Coulthard-backed film company receives Channel 4 investment: Channel 4 has taken an equity stake in Whisper Films, a London-based production company specialising in sports content.
CLS Holdings portfolio sees surge in value: CLS Holdings has seen the value of its portfolio jump four per cent to £1.4bn in the past six months on the back of the economic recovery and demand from companies being priced out of central London areas.
Centamin share price jumps as dividend grows: Gold mining firm Centamin said that falling gold prices and a drop in sales had hit earnings during the second quarter to 30 June.